A analysis by Smart Asset: a personal finance company based in New York, calculated the annual salary needed to comfortably afford rent for a two-bedroom apartment in 15 U.S. cities. That rent is costly in major metropolitan cities is no surprise, but seeing it in terms of annual salary is shocking.
The analysis uses the Department of Housing and Urban Development’s definition of “affordable” rent. The agency defines housing as being affordable if the cost doesn’t exceed more than 30 percent of the total household income. Any household that spends more than that on rent is considered “cost-burdened.”
The analysis looked at the rent-to-income ratio in 300 American cities, and then scaled it down to the 15 largest metro areas. Keep in mind: the number is the salary someone would need to make so rent didn’t exceed 30 percent of their income.
Rent prices are based on Fair Market Rents for two-bedroom apartments in April 2016. Fair Market Rent is a gross rent estimate calculated by the HUD. It includes the shelter rent plus the cost of all tenant-paid utilities except telephones, cable or satellite television service, and internet service.